Increase in productivity and profitability
The harvest volume in 2017 was 238 600 m3, an increase of 21.2 % over the previous year (196 800 m3). In the sawmills in Bambidie, 126 000 m3 and thus 1.4 % more logs were processed, and yield was increased by 3.8 percentage points. This resulted in a sawn timber production of 44 700 m3, an increase of 13.6 % over the previous year. The fact that sales did not increase to the same extent is due on the one hand to the product mix and on the other hand to the delivery difficulties at the end of the year, which led to an increase in sawn timber inventories. Market prices for sawn timber were volatile in the reporting period. This entailed a recovery in prices at the beginning of the year and a decrease slump over the course of 2017.
The veneer plant (TGI) processed 55 200 m3 and thus 4.5 % fewer logs, but the yield was increased by 0.5 percentage points. As a result, the production volume of veneer declined by 3.6 % in 2017. Demand for top quality was high all year round, but demand for the second-grade goods fell sharply and forced us to reduce production by one shift to 2-shift production starting in September 2017. We were able to resume full production in mid-January 2018 thanks to changed market conditions.
PW Gabon’s total investments in the amount of EUR 2.5 million were used mainly for forest machinery, homes for employees and their families in Bambidie, the replacement and expansion of our vehicle fleet, and a new drying kiln for the veneer plant. The increase in the harvest volume required the establishment of an additional team for forestry operations and the associated technical equipment.
The staffing situation remained stable, and the fluctuation among expats was in line with the usual pattern. The maintenance team was strengthened, and additional skills were developed, promoted, and expanded at various locations.
Now the focus will be on further expanding the proven management team and thus creating the conditions for managing targeted growth projects.
The liquidity situation eased thanks to the result achieved, although the input tax credit with the Gabonese government meanwhile amounts to EUR 3.7 million. In 2017, it was possible to finance parts of the investments out of the cash flow. However, a large part of the operating cash flow was tied up in inventory, which increased due to delivery difficulties. During the year, there were repeatedly bottlenecks in rail and road traffic. There were too few railcars available, and an interruption in the road network caused a detour of more than 200 km each way. While a second port was inaugurated in Owendo, operated by the same operator, the reorganization of port operations caused disruptions that lasted until the end of the year and made it impossible to ship all goods on time.